Restructuring Schemes – Customised (ESS-C)

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Small firms to get help with debt restructuring under new schemes
The Law Ministry earlier, had introduced several measures due to Covid-19
pandemic to alleviate the impact of the crisis on business, including a moratorium on legal action over rents and contracts and raising thresholds for bankruptcy and insolvency proceedings. Small firms in financial distress due to Covid-19 will receive help from two new schemes launched on 5th October 2020 – as concerns grow that companies in badly hit industries may be plunged into bankruptcy once earlier support measures come to an end.

The Sole Proprietors and Partnerships scheme
The Association of Banks in Singapore (ABS) aims to complement this by focusing on business that are struggling to service loan commitments but are likely to recover given time and revised repayment terms. It was developed with the support of several ABS member banks, the Monetary Authority of Singapore and Enterprise Singapore. The scheme will allow businesses to work with Credit Counselling Singapore, a non-profit organization, to help restructure unsecured debt owed to 17 participating lenders, including all the main banks here. Firm can work to words securing lower monthly installment payments for unsecured borrowing by extending the loan repayment period up to a maximum of eight years. Interest rates for the restructure debt will be based on the loan’s original contractual terms, subject to a maximum of 7 percent a year. A firm can qualify if its total unsecured debt does not exceed $1 million and it owes unsecured debt to two or more of the participating lenders. Approval will be at the sole discretion of the lenders (Banks).

The extended Support Scheme – Customised (ESS-C)
Customised, is available to SMEs with viable businesses. It has been devised with the support of the Finance Houses Association of Singapore and led by United Overseas Bank and other major banks to help restructure a firm’s credit facilities across multiple banks and finance companies. The intent is to facilitate a more holistic restructuring of an SME’s loans compared to if the SME had to approach its lenders individually. SMEs have already looked at bringing down costs since the coronavirus hit eight months ago. For those who are looking to soldier on, the extra help in access to capital.The schemes would help companies wind down their businesses that may longer be viable.More information on the SPP scheme will be available from Credit Counselling Singapore (CCS) and information on the ESS-C will be provided on the Association of banks in Singapore website.

Compulsory e-Filing for Form C-S/ C

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Compulsory e-Filing for Form C-S/ C
Filing Due Dates
The annual filing due dates for Form C-S/ C/ C-S lite is:
YA 2020:-15th DEC
YA 2021:-30th Nov

Form C-S/ C/ C-S lite
There are three types of Income Tax Return, Form C-S,Form C-S lite and Form C.The Form C-S/ C-S lite /C is a declaration form for companies to declare their actual income. Companies are still required to file the Form C-S/ C/C-S lite even if they are making losses.

Conditions to File Form C-S/C-S lite,Form C

Conditions Form C-S Form C-S Lite Form C
Incorporation Company must be
incorporated in
Singapore		 Company must be
incorporated in
Singapore		 All other companies
which do not fulfil the
condition of filling Form
C-S or form C_S lite
are required to file
Form C –along with
Tax computation and
supporting schedules
(including Detailed
Profit and Loss
Statement) ii. Audited/
Unaudited Financial
Statements
Annual revenue $5 million or below $200,000 or below
Condition for carrying forward losses Not claiming

Carry-back of Current
Year Capital
Allowances/ Losses

Group Relief

Investment

Allowance

Foreign Tax
Credit and Tax
Deducted at Source

 Not claiming

Carry-back of
Current Year Capital
Allowances/ Losses

Group Relief

Investment

Allowance

Foreign Tax
Credit and Tax
Deducted at
Source

Form C filling by dormant companies
A dormant company is one that does not carry on business and has no income for the whole of the basis period. For example, if a company did not carry on business and had no income for the whole of the basis period ending in year 2019, it will be regarded as a dormant company for Year of Assessment (YA) 2020.
A dormant company must e-File its Income Tax Return unless the company has been granted waiver to file income tax return. A dormant company will need to file its Income Tax Return using the File Form C-S/ C/ C-S lite for Dormant Company eService

OUR PROFESSIONAL SERVICES FOR VCC

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OUR PROFESSIONAL SERVICES FOR VCC (VARIABLE CAPITAL COMPANY)

Our team of professionals will assist you to set up VCCs in Singapore. Advise on managing and administering VCCs. We have made a brief note about VCCs for your perusal.

VCC- Variable Capital Company’s Act was introduced to manage funds and the act has come into force w.e.f. January, 2020.

VCC is used as an “investment vehicle” for the purpose of wealth management or investment management activities in Singapore. It can be used for both, as open ended or close ended fund structure. It is a legal entity that can hold one or more listed investments as well as unlisted investments. VCC is a corporate entity which is established in Singapore under the Variable Capital Companies Act 2018 (“VCC Act”). The approval for incorporating a VCC as well as registration of its sub funds (if any), is granted by the ACRA upon meeting prescribed requirements under the VCC Act and regulations thereto. VCC shall be managed by a Permissible Manager in Singapore.

“VCC” stands for Variable Capital Company, a fund entity in Singapore having a corporate form.VCC is a type of legal entity to hold asset and investments for the purpose of engaging in wealth management activities. VCC can sue and be used in its own name. VCC has to be managed by a licenced wealth manager like EWM or a manager who is otherwise permitted by the Monetary Authority of Singapore. Introduction of VCC regime is an effort of Singapore Government to enable domiciliation of both fund and its Manager in Singapore. Subject to meeting prescribed conditions, VCC can avail various incentives and benefits in Singapore, including tax exemptions.

Advantages and benefits
1) VCC’s flexibility to issue and redeem its shares, with operational ease.
2) Confidentiality- VCC’s Constitution, Annual Return filings, Register of Shareholders are NOT available to public/3rd parties from the records of ACRA.
3) Can pay dividends out of capital, which gives flexibility to Managers to meet such obligations
4) VCC’s capital is accounted on a fair value basis and its NAV = paid up share capital at all times.
5) VCC’s capital structure will have, Management Shares carrying voting rights (no dividend rights); and Participating Shares carrying NO voting rights (redeemable, eligible for dividends- as and when declared)
6) Provides continuity, since VCC is a corporate entity (unlike a non corporate investment vehicles)
7) Tax/financial incentives are available, subject to meeting specified requirements
8) VCC can obtain Certificate of Residence (COR) from IRAS, in its own name, unlike a unit trust.
9) VCC, if structured well, it can be used as a legal entity for inter-generational wealth transfer.

Primary conditions and criteria
1) VCC Sponsor and its directors shall be “fit and proper”
2) VCC is essentially established in Singapore under the VCC Act and regulations thereto.
3) Submission of prescribed application and requisite declarations are made to ACRA, for seeking incorporation of the VCC
4) Assets and Liabilities of each sub fund are to be segregated, accounted for separately, ring fenced and accounted for at fair value.
5) Mandatory appointment of Director(s), VCC Manager, Company Secretary and Auditor.
6) Custodian appointment becomes essential when the VCC is investing in listed, traded or quoted securities.
7) AML and CFT guidelines of MAS are applicable to VCC.
8) Appropriate governance framework should be created for the day to day operations of the VCC. This is critical for both VCC Sponsor and VCC Manager.

EMPLOYERS DON’T HAVE TO PAY INCOME TAX ON JSS WAGE SUBSIDIES

The employers in Singapore are given JSS wage subsidies to help to retain the employees in the pay roll and manage the Company during the Covid 19 pandemic. Companies are exempted to pay income tax on the JSS wage subsidy payments made for the yearsof asst., 2021 and 2022 depending on the payments made by the govt.Self employed person income relief scheme payments made by the govt., (SIRS) to individuals(Covid-19 support grant) also do not have to pay income tax on these payments made to them.Changes were made to the income tax act and was approved in parliament during Nov., 2020.

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